UK seeks to overhaul its audit regulatory framework
– The UK has commenced a consultation to possibly reform its audit regulatory framework.
– Some critics are dubious whether it will matter if the reform is patterned after the US’ Sarbanes-Oxley reform
As this UK government press release notes, the UK’s Business Secretary has commenced a “consultation” (that’s the UK’s version of a proposal) about overhauling the UK’s audit regime
This article by Francine McKenna notes she’s dubious about whether this audit reform effort will amount to much. Here’s an excerpt:
It would be a huge mistake for the UK to model its reforms — ones that have so much momentum and urgent need — after US auditor reform that’s failed so miserably. UK investors deserve more.
I wrote in 2012, ten years after Sarbanes-Oxley was passed, that the law and feeble enforcement of it had failed to restore investor confidence in audit firms after Arthur Andersen’s failure to mitigate fraud at Enron. Nearly twenty years on my verdict is even more harsh. The Sarbanes-Oxley law has turned out to be a negotiated mélange of rules that have been barely enforced and gradually watered-down to within an inch of their original intent, all to reduce costs for corporations and increase new share listings.
Is the latest UK reform package truly radical or just more of the same incremental reforms, full of sound and fury yet signifying no meaningful change once again?